23 FEBRUARY 2017
Budget Speech 2017: Equal Education Applauds Treasury for Prioritising Basic and Higher Education
Finance Minister Pravin Gordhan’s 2017 Budget Speech spoke directly to two concerns that Equal Education has repeatedly raised: the importance of early childhood development (ECD), and the need for pro-poor, pro-rural funding.
The establishment of a conditional grant for ECD is to be celebrated. However, the amounts in question are still comparatively small and leave hundreds of thousands of young children without government subsidies. Further, we are bitterly disappointed that a conditional grant to fund scholar transport has not been introduced, and we remain deeply concerned about the slow pace of implementation of school infrastructure delivery.
Unfortunately, Minister Gordhan failed to acknowledge the important shortcomings of the current provincial funding process (for example, the systemic underfunding of rural education). He chose instead to emphasise that redistribution in support of education in rural areas remains the central thrust of the budget. While this might be true in principle, it is definitely not true in practice. As we have pointed out in our pre-Budget Speech statement the equitable share formula used to allocate provincial funds, fails to account for the impact of historical inequalities and rurality on education costs and therefore disadvantages poor and rural provinces. We therefore reiterate that there is a pressing need for Treasury to review its education funding model.
Early Childhood Development (ECD)
EE is pleased to note the introduction of a conditional grant for ECD – but it must be noted that this fund is still far too low to meet the need. The grant, to be administered by the Department of Social Development, consolidates and expands existing government subsidies to children enrolled in registered ECD centres as well as subsidies for minor upgrades to ECD centres. Not only does this fund allow the ring fencing of funds toward ECD provision, it also introduces ECD as a line-item on the budget, making ECD funding easier to track and compare across years.
At the end of the 2015/16 budget year, approximately 1.5 million children were accessing ECD, but an ECD subsidy to centres was only being disbursed for 593 405 children. The subsidy is provided to registered ECD centres and is calculated based on whether the caregivers of children aged 0-years-old to 4-years-old pass an income means test.
Over the medium term expenditure framework (MTEF) period, a total of R1.1 billion is allocated to ensure an estimated 113 889 more children attend an ECD centre that receives a subsidy to care for and educate them. This represents progress, but continues to exclude an unacceptably high number of children. Treasury has allocated an additional R230.6 million for minor facility upgrades at ECD centres that are conditionally registered to allow them to meet minimum requirements in terms of the Children’s Act (2005).
The complicated registration process means many ECD centres that would otherwise qualify for funding, can not receive subsidies. There is an urgent and pressing need to review this process to ensure that ECD centres in poor and rural areas are not unfairly excluded from accessing funding. It is commendable that government is taking steps to assist ECD centres with registration by allowing for provisional registration and supporting centres with infrastructure upgrades. It is important that infrastructure allocations are made and that these funds are not reallocated towards other priorities. The Department of Social Development’s ECD audit of 2013 found lack of adequate infrastructure to be the largest factor hindering centres from meeting the full registration requirements.
While it is encouraging to see that government is making a visible commitment to ECD, it bears mentioning that the R317.6 million committed to ECD for the 2017/18 budget year amounts to a very small allocation per learner if compared to the total enrollment in ECD centers. This compares very poorly to other sectors of the education system. While the Department of Basic Education (DBE) also contributes funding to ECD, the various challenges that continue to plague the sector, requires a significantly larger budgetary commitment.
The audit of 2013 reveals that the school infrastructure crisis in this country extends to ECD centres: for instance, one quarter of ECD centres suffer an inadequate number of toilets and the same amount have overcrowded classrooms.
Lack of learning and teaching support materials is widespread, and only 10% of ECD practitioners have a qualification over and above matric. Just 25% have received some training in ECD. Appallingly, the average monthly salary of an ECD practitioner ranges from R1 400 to R2 000 per month – and excludes pension fund, medical aid or a housing subsidy
EE has stressed before the important role access to proper ECD plays in learners’ ability to achieve learning outcomes in the basic education system. There is widespread agreement that investment in early childhood development (ECD) can help close the gap between children from affluent and impoverished households.
Given that many South African children enter formal schooling with their development potential already significantly compromised, investment in ECD is arguably the most cost-efficient fiscal expenditure to directly impact that gap.
Teaching and learning
EE welcomes the roll out of a national reading diagnostics assessment tool to assist teachers in measuring the reading progress of learners at different intervals in grades 1 to 3. The aim is to help teachers track learners’ reading ability in the foundation phase and is set to benefit 1000 rural and township primary schools in 2017. R30.1 million has been allocated for this purpose over the MTEF period. The programme will be expanded to all public primary schools over the medium term.
The importance of addressing reading challenges in early grades, cannot be overstated. Learning deficits acquired in the foundation phase become the root of underperformance in the later, high school grades. Learners who cannot read fluently by the end of Grade 4 cannot engage with the rest of the curriculum in meaningful ways. This is primarily because in grades 1 to 3 the curriculum focuses on learning to read, whereas from Grade 4 there is a shift to reading to learn.
This success of this national reading programme will depend largely on the extent to which teachers will be properly trained and supported in using the tool and interpreting results. Teachers also need to be guided in how to respond to results by adjusting and tailoring teaching methods accordingly.
EE notes with some concern the baseline reductions of R63 million to the maths, science and technology grant. Cabinet has cited the capacity of the sector to spend these funds as the main reason for the decrease. The education sector’s inability to spend the desperately needed funds allocated to it remains a recurring and pressing concern. This is particularly worrying in light of the dire need nationally for access to resources provided for by this grant, such as laboratories and computers. For example, as at June 2016, 20 292 schools, or 81.7% of all schools, had no laboratories.
Another positive development from Minister Gordhan’s speech is the steady expansion of the Second Chance Matric Programme. The programme was piloted last year and aims to provide support to learners registered to rewrite the National Senior Certificate examination, and to progressed learners . The programme, which provides face-to-face classes at 50 venues across the country, has been allocated R268.8 million over the MTEF period.
The commitment to assisting learners to pass matric is commendable and it is promising that retired teachers and current teachers who studied through State funding will be employed on a temporary basis for this purpose. But it is not yet clear what the outcomes of the pilot were and whether the programme has meaningfully supported learners in their exam preparation. Whether the DBE will manage to effectively roll out this project therefore remains to be seen. However, in principle the project addresses an important need.
The projected merger of the Schools Infrastructure Backlog Grant (SIBG) with the Education Infrastructure Grant (EIG) has been postponed until the 2018/19 term. According to Treasury, this postponement is because the schools targeted by the Accelerated Infrastructure Delivery Initiative (ASIDI) – which is funded by SIBG – must first be replaced or provided with the basic services for which the programme was developed.
That ASIDI has not met its targets, despite the programme running for more than double the time it was intended to, is indicative of the slow pace of school infrastructure delivery, and an indictment unto itself. It is no wonder that the Department of Basic Education (DBE) and all nine provincial education departments (PEDs) violated the law and failed to meet the first Norms and Standards deadline of 29 November 2016, by which time all schools had to be provided with water, electricity and sanitation, and schools made of mud, asbestos, wood or iron should have been rebuilt.
Although assurances that ASIDI will be focusing on completing its mandate by the end of 2017 are positive, EE remains wary of claims like this. In 2015/16, ASIDI electrified only two schools.
Below are the tables depicting the EIG and ASIDI allocations:
Table 1: Total allocations to education infrastructure grant: 2015/16 to 2019/20
Sources: National Treasury, 2011, 2012, 2013, 2014 Division of Revenue Act, 2015 Division of Revenue Bill, 2017 Division of Revenue Bill
Table 2: Total allocations to ASIDI: 2015/16 to 2019/20
Sources: National Treasury, 2011, 2012, 2013, 2014, 2015 Division of Revenue Act, 2016 Division of Revenue Bill, Appendix W9 & p.85, 2017 Division of Revenue Bill.
Although the 2017/18 allocations for both grants enjoy increases from the 2016/17 allocation, both take a slight dip when compared to the projected allocations for this year. When one accounts for the ASIDI funding that remains separate rather than merging with EIG, the EIG has been decreased by R140 million, and ASIDI by R25 million, as compared to last year’s projected allocation for 2017/18.
In addition to the above, EE is concerned about some aspects of the merger of the grants, should ASIDI not complete its mandate by the end of year. ASIDI was originally devised as a short-term plan to fast-track providing relief to the worst-off schools. Delays continue to shortchange poor learners, particularly ones from rural provinces. Meanwhile, longer-term Norms and Standards deadlines around the provision of classrooms, laboratories and libraries draw closer. The longer the most basic backlogs take to eliminate, the further government will fall behind on meeting the later deadlines.
EE understands that, should ASIDI not complete all schools this year, a new component would be added to the EIG, over and above the current base component that is allocated to all provinces, and the performance-based incentive components. This ASIDI component would be targeted at the remaining schools on the ASIDI list.
While this is reasonable in terms of the Norms and Standards, which places the burden for implementation on provincial education departments, it adds a further layer of complexity to the grant. This places additional administration and project management burdens on provinces, whose capacity for delivery varies and whose performances in this regard have been historically substandard. Unless provinces grow their capacity to an extent which allows them to use their additional funding well, the decision to remove the DBE from responsibility for direct infrastructure provision may well slow down this much needed process.
EE is disappointed that no conditional grant was allocated towards providing a scholar transport system for learners in this year’s budget. This lack of transportation to take learners to schools remains a severe but overlooked issue.
According to Stats SA, 81% of the 12,3 million South African learners, who walk to school every day, travel about 30 minutes in one direction. Note that those travelling distances even longer than that are learners living in rural areas.
We are concerned that, though a national scholar transport policy does exist, Treasury has not allocated a conditional grant to fund it. This means that learners will continue to walk laborious distances, facing the possibility of theft and sexual violence along the way, and arriving to school exhausted and unable to concentrate.
As it stands, the funding toward scholar transport is decided by each individual province and allocated from their often insufficient Equitable Share. The 2016 and 2017 Division of Revenue Bills set no funds aside to be used exclusively for scholar transport. This leaves the responsibility for allocating and managing funds to the PEDs, who tend to not budget according to the extent of the need for scholar transport. So long as there are no funds set aside exclusively for scholar transport, and the provisioning of scholar transport remains the responsibility of two departments – Basic Education and Transport – that do not collaborate effectively with each other, learners will continue to walk these punishing distances to school.
EE therefore calls on the DBE and the Department of Transport to take responsibility for the national scholar transport policy, present a clear plan which sets out clear lines of accountability, and request Treasury to fund to a conditional grant to fund this very necessary venture.
The allocation to post-school education and training is the fastest-growing element of the budget. Spending in this sector is expected to reach R89.8 billion by 2019/20, growing at an average annual rate of 9.2% over the medium term. Post-school education now makes up about 5% of the total national budget.
Some funding disparities persist within the sector, however. Of the total amount allocated over the medium term, 42.7% is for university subsidies, 21.9% for the National Student Financial Aid Scheme (NSFAS), and 9.7% for technical and vocational education and training. This is while university enrolments were at 1 million in the 2016/17 year compared to TVET enrollments of 710 535.
It is clear that technical and vocational education receives a disproportionately small amount of funding as compared to universities. This is compounded by the negligent allocation to TVET infrastructure funding and the slow implementation thereof. Of the 12 new TVET colleges that were expected to be built by 2017, only 3 have been completed. Two other campuses are almost at completion, while the rest remain in tender evaluation stage. This entire project was allocated R2.5 billion — the smallest of all the higher education and training infrastructure programmes.
We would like to bring to the attention of Minister Nzimande that he cannot continue to ignore the problems that besiege TVET colleges; the investment that Treasury has put forward for higher education should be followed by a deep and genuine implementation plan to improve the state of TVET colleges.
With regards to academics, though there are a few highly functional TVET colleges, the sector as a whole does not perform well. Completion rates are low – partly because many of the courses are challenging, and teaching can be poor. Pass rates for the National Certificate Vocational (a qualification which involves a mixture of theory and practice) average 42% and throughput rates are significantly lower.
The Finance Ministry must be applauded for compiling a budget that practically highlights how to begin a process of ‘radical transformation’ with ⅔ of the budget intended to achieve social rights. The continued prioritisation of the poor and an investment in both basic and higher education is an indication of a Treasury that wants to move this country forward. However, while Gordhan again performed a delicate balancing act, it is now up to the departments (both national and provincial) to use their budget allocations efficiently and effectively, and prioritise the poor.
For further comment:
Roné McFarlane (EE Campaigns Researcher) 081 744 5627
Philile Ntombela-Masson (EE Researcher) 076 776 5717
Tshepo Motsepe (General Secretary of EE) 071 886 5637
 Equal Education. 2017. Budget Speech 2017: Budgeting at the Height of Inequality (https://equaleducation.org.za/2017/02/22/2284/)
This figure was obtained from National Treasury’s 2017 Estimates of National Expenditure. However, in a recent speech the Minister of Social Development, Ms Bathabile Dlamini, put the number at 937 012.
 Economic Policy Research Institute. 2014. Audit of Early Childhood Development Centres: National Report. Pretoria: Department of Social Development.
 Kotzé, J., 2015. The readiness of the South African education system for pre-Grade R. South African Journal of Childhood Education. 5 (2015):1-28
 Equal Education. 2017. Budget Speech 2017: Budgeting at the Height of Inequality (https://equaleducation.org.za/2017/02/22/2284/)
 NEIMS Standard Report 2016 (http://www.education.gov.za/Portals/0/Documents/Reports/NEIMS%20STANDARD%20REPORT%20JUNE%202016.pdf?ver=2016-07-14-131548-930)
 These are learners who were promoted to matric after failing grade 11 more than once. This approach forms part of a strategy aimed at reducing dropout rates.
 Stats SA, 2016 Education Enrollment and Achievement, page 71-72
 National Treasury, Budget Review 2017
 National Treasury, Budget Review 2017, Page 155.